Even if you can access the FSCS or the Ombudsman you should still be aware that you will not receive compensation just because your investments perform badly.
Some authorised firms offer both regulated and unregulated services to consumers. For example, a firm could be authorised by us to provide a regulated activity such as arranging for you to buy or sell shares. However, they may not need authorisation to provide an unregulated activity such as arranging for you to invest in gold.With that in mind, your potential access to the FSCS and the Ombudsman will depend on two things:
Whether the firm you're dealing with is authorised, and,2. Whether the service that the firm provides to you involves regulated activity that is covered.
Please be aware that just because a firm says you are covered, does not mean you will necessarily be protected if things go wrong. The Ombudsman and the FSCS are subject to different rules which determine when they can and can't award compensation – so claims are decided on a case by case basis.There are activities that we don't regulate and so youwillnot have access to the FSCS and the Ombudsman. These include, activities involving direct investments in:
commodities e.g. gold, bamboo, diamonds, graphene
hotels or hotel rooms
UK or international forestry
land for development
You should consider getting financial advice if you need help understanding the nature of the investment and the risks involved. An adviser will be able to help you create a plan to meet your goals and recommend the right balance of investments for your risk appetite. If you do opt for an adviser, make sure they are regulated by the FCA. Here are some tips about how to find one and some questions to ask.
Be wary of investment scams
Promises of high returns can often be a sign of a scam. This is particularly the case if the risks are being minimised or hidden in the small print. You should be especially wary if you've been contacted out of the blue and pressured to invest quickly. Scammers usually cold-call but contact can also come by email, post, word of mouth or at a seminar or exhibition. Scams are often advertised online too. The safest thing to do is reject all unexpected offers.The risk of being scammed can still be high even if you have approached the firm yourself following web searches or via an advert. Visit our ScamSmart pages to learn more about the warning signs of an investment scam and how to protect yourself.
Loan Offer Latest
Yes You Can, rated B, for £30,000 with an 11 per cent fixed yield over five years, is now filled. Project Rhapsody rated A+, with an 8 per cent fixed yield for three years is also filled. More loan offerings will land on site soon.
Historical Performance And IFISA Process Guide
Money&Co. lenders have achieved an average return of more than 8 per cent gross (before we deduct our one per cent fee).
That figure is the result of over £20 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders' capital is at risk. Read warnings on site before committing capital.
Money&Co. has been lending for over 5 years and has only had one bad debt so far, representing a bad debt rate of 0.03 per cent per annum.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income.Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.So here's our guide to the process:
Step 1: Register as a lender. Go to the login page, and go through the process that the law requires us to effect. This means we have to do basic checks on you to comply with money-laundering and other security requirements.
Step 2: Put money into your account. This is best done by electronic transfer. We can also process paper cheques drawn in favour of Denmark Square Limited, the parent company of Money&Co.
Step 3: Buy loans in the loan market. Once you've put cash in your account it will sit there - and it won't earn interest until you've bought a piece of a loan. It's this final step that requires lenders and IFISA investors to be pro-active. Just choose some loans - all loans on the Money&Co. site can be held in an IFISA - and your money will start earning tax-free interest.
The ISA allowance for 2019/20 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We're assuming a 7 per cent return, net of charges and free of tax here.Once you have made your initial commitment, you might then consider diversifying - buying a spread of loans. To do this, you can go into the "loans for sale" market. All loans bought in this market also qualify for IFISA tax benefits.